Excessive China sales to Russia, containers are piled up: Reports
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During the initial seven months of this year, the trade relationship between China and Russia experienced a remarkable surge, with trade volumes increasing by an impressive 37%.
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In this photo taken Monday, Feb. 20, 2012 photo, a truck driver waits to unload his cargo at the Caofeidian Port in Tangshan, in northern China's Hebei province (AP)
At present, Russia is grappling with an excess of 150,000 shipping containers that rail depots are struggling to handle. This surplus reflects a surge in the influx of Chinese goods into the country, with significantly fewer containers moving in the opposite direction.
This analysis was published on Thursday by Container xChange, a trading platform based in Hamburg, Germany.
Christian Roeloffs, co-founder and CEO of Container xChange, highlighted the situation, stating, "There is substantial cargo flow from China into Russia but a notably limited flow back from Russia to China." This imbalance between supply and demand has had a severely adverse impact on container logistics businesses.
Read next: Cargo traffic via Russia-China border hits record high in January
Unlike the cargo ship lineup that occurred off the coast of Los Angeles three years ago, driven by a wave of imports to serve American consumers during the pandemic, the container pileup in Russia is more closely linked to geoeconomic factors.
Despite facing sanctions from Western economies following its special operation in Ukraine, the Russian government anticipates that trade volume with China will surpass $200 billion this year, up from $185 billion in 2022, according to Container xChange.
Moscow Container Prices Plunge
Containers in Moscow are currently selling for less than half the prices seen elsewhere in the world, leading to a significant downturn in the secondary container market in the city.
The average cost of purchasing a used 40-foot "high cube" container, known for its slightly larger capacity compared to a standard 40-foot container, has plummeted to just $580 as of this week. This starkly contrasts with the price of $4,175 recorded in February 2022.
In the case of new containers, the price has experienced a notable decline, dropping from $4,309 prior to the war in Ukraine to a current price of $1,450, according to data from Container xChange.
Trade Jump
Trade between the two countries saw a substantial increase of 37% during the initial seven months of this year, totaling $134.1 billion, as reported by Container xChange, citing data from Chinese customs. China's exports to Russia exhibited remarkable growth, surging by 73% to reach approximately $62.54 billion, while imports from Russia also expanded, growing by 15% to reach $71.6 billion.
The bilateral trade relationship continues to strengthen, as indicated by recent agreements. On Monday, the China Nonferrous Metals Industry Association and the Russian Aluminium Association signed a memorandum of understanding in Beijing, with a focus on enhanced collaboration in areas such as alumina, aluminum fabrication, and aluminum products.
Read next: Russian trade with China will reach $200 billion by 2024
Additionally, earlier this month, Fesco Transport Group, a prominent Russian logistics provider, entered into agreements with Jilin Northeast Asia Railway Group and the Union of Chinese Entrepreneurs.
These agreements include plans to monitor existing container shipping routes between Russia and China and expand the pool of potential shippers in the China-Russia-China direction, as outlined in a press release on Fesco's website.
Furthermore, the Kiel Trade Indicator recently reported that Russian port activity has rebounded to levels approaching those seen before the conflict.
